With families increasingly waiting for child care and maternal services, funding for a new children's centre couldn't have been more welcome for Korumburra, a township of just over 3,000 people in South Gippsland.

Rebecca Marriott, Vice-President of the Karmai Community Children's Centre Board, says it's been a necessity for years.

"The waiting list for child care and the kindergarten in Korumburra has blown out to up to 40 children waiting for places. There's an ongoing problem of access as we currently only have 45 places," she said.

Korumburra's planned children's centre received $1.6 million in federal budget funding; the exact amount the South Gippsland Shire Council had estimated was needed to complete the project's funding.

The centre will include a kindergarten, 120 places for childcare, out-of-hours care, maternal and child health and specialist services aimed at reducing barriers for families entering the workforce or returning to study.

Jan Martin, Director of Community Services at the South Gippsland Shire Council, says without the federal government funding, the development would have become an impossible feat.

"It would have been difficult to complete and Council would have had to consider whether to invest further money into the development," she said.

"It was the last amount of money we required to fund the $5.2 million project. We received $1.6 million from state government, Council gave over $2 million and the Karmai Centre gave $100,000 to the project."

It's anticipated the new centre will boost Korumburra's economy by $3.6 million annually, while introducing 27 new jobs to the area.

Jeanette Harding, Mayor of the South Gippsland Shire, says its benefits are not only financial, but social as well.

"When this is completed, a lot of mums can go back to work because at the moment there are limited places for them to take their children; it will be the making of Korumburra and the district," she said.

"It is an investment in the education and care needs of local children and the longer term social and economic benefits will be felt for years to come."

After several rejections for funding from both state and federal governments, Rebecca is relieved the centre is finally going ahead.

"There are lots of opportunities for what we can offer our - it's not just about childcare for families, it's also about the educational experience for children," she said.

Construction is expected to commence in October 2015, and the centre's construction is anticipated to be completed in 2017.